Galeries Lafayette: the founder's heirs shrank the store estate to survive COVID

Galeries Lafayette has been in the same family since 1893. In 2014 its fifth generation, Nicolas Houzé, took the top job with his father Philippe as executive chairman of the group, just as e-commerce was eroding French department stores. He pushed outward instead: stores in Dubai, Beijing, Jakarta and Istanbul, a stake in La Redoute and a purchase of BazarChic, and a plan to double the international share of revenues.

Then COVID arrived. Lockdowns closed the 30% of group stores that generate 70% of revenue, put 7,000 employees on furlough, and cut off the foreign shoppers who made up 60% of sales at the Haussmann flagship. Houzé told French media in February 2021 that he did not expect to return to 2019 levels before 2024.

His answer was to make the group smaller rather than sell it. In January 2021 the group secured a €300 million state-guaranteed loan and confirmed a plan for 189 job cuts at headquarters and its travel-retail arm; in August 2021 it franchised 11 more provincial stores to local operators. The family kept the brand, the flagship and full ownership while handing the stores it could no longer fund to people who could.

Family ownership intact: a €300M state-guaranteed loan, 11 provincial stores franchised, and the flagship kept trading toward a 2024 recovery.

Department stores had been losing shoppers to e-commerce for a decade, and the pandemic removed even the tourist traffic that paid for the flagships.

Sixty percent of the Haussmann flagship's revenue came from foreign visitors, so border closures hit the crown jewel harder than the chain's average store.

The families refused to sell: a €300 million state-guaranteed loan was cheaper than diluting five branches of heirs.

Franchising provincial stores shifted their fixed costs to local operators while keeping the brand present across France.

An heir who sells stores his ancestors built is doing succession's hard half: inheriting a company matters less than what the next generation dares to shrink when the crisis comes.

The family kept the group and the Haussmann flagship, aiming to return to its 2019 revenue level by 2024. The pruning became permanent: eleven provincial stores went to franchisees in 2021 alone. In July 2025 Houzé passed the day-to-day directorship to Arthur Lemoine while remaining president of the executive board — the fifth generation still in charge, and explicit about its role as a bridge: 'I see myself as a connection between the fourth and the sixth generation, making sure to leave the company to the next generation in a better shape than when I took over.'